In PPACA World, what counts as real coverage?

Which health insurance products are solid enough to count as “minimum essential coverage” (MEC), and which are narrow enough to escape from the Patient Protection and Affordable Care Act (PPACA) major medical coverage mandates?

Officials at the Center for Consumer Information & Insurance Oversight (CCIIO) have looked at those questions in two new batches of guidance.

CCIIO is an arm of the Centers for Medicare & Medicaid Services (CMS), which, in turn, is an arm of the U.S. Department of Health and Human Services (HHS). CCIIO is in charge of HHS efforts to implement the PPACA provisions that affect the commercial health insurance market.

Kevin Counihan, director of CCIIO, talks about the definition of MEC in an explanation of how HHS will handle applications from insurers, plan sponsors and other entities that want to get HHS to classify certain types of coverage as MEC. The HHS approach could affect whether taxpayers with new or unusual types of health coverage can use the coverage to meet the PPACA individual health insurance coverage mandate.

Officials talk about the definition of “excepted benefits,” or health insurance products that fall outside the scope of major medical insurance mandates in PPACA and the Health Insurance Portability and Accountability Act of 1996 (HIPAA), in a new set of answers to frequently asked questions (FAQs) about PPACA. That could affect how much certain supplemental products cost or whether continuing to sell them is still possible.

For a look at what may be in the glossaries that shape how PPACA World works, read on.

1. The MEC evaluation process guidance

Section 5000A of the Internal Revenue Code (IRC), a provision added by PPACA, is set to require many consumers who failed to have MEC throughout 2014 to pay a penalty. For most consumers who earn enough to pay the penalty and are unable to get an exemption, the 2014 penalty will equal 1 percent of income. The penalty is set to rise to 2 percent of income for 2015 coverage.

When PPACA opponents were fighting the mandate in the courts from 2010 through 2012, some of the opponents, and some of the judges, compared the MEC mandate to a requirement for consumers to buy broccoli.

PPACA has directly defined many types of health coverage, such as individual major medical policies that meet PPACA standards, as MEC.

HHS has issued regulations classifying other types of coverage, such as Medicare Advantage plans and refugee medical assistance from the Administration for Children and Families, as MEC.

In October 2013, CMS officials said other types of coverage that comply with “substantially all” PPACA requirements could go through an administrative process to qualify as MEC.